(Bloomberg) -- YouTube said it’s starting a $100 million fund for creators of video Shorts, the company’s feature that rivals TikTok. In a departure for the online video giant, creators will be paid based on viewership and engagement rather than advertising revenue.In addition, YouTube is opening the fund to any video maker on its site who follows its guidelines, not just those eligible for the advertising program, the company said Tuesday in a blog post.The fund for Shorts creators is the latest entry in a social media bidding war for online personalities spurred by the success of Bytedance Ltd.’s TikTok. Snap Inc. launched a new fund last fall for top performers of its video product. Facebook Inc. has tried to lure stars -- and copied features -- from TikTok, and introduced more ads on its shorter videos.YouTube, part of Alphabet Inc.’s Google, recruited TikTok stars, too. And with its fund announcement, YouTube is expanding features to make it easier to shoot footage for Shorts. Part of TikTok’s success has been the ease of making videos on smartphones.YouTube has been funding creators well before its social media rivals. The company has split ad sales with its video makers for more than a decade, spurring a business that generated $19 billion in ad sales last year as well as many moderation hassles. In 2018, YouTube restricted the number of creators after a flurry of brand safety mishaps. It hasn’t landed on a revenue model for Shorts yet.Still, many YouTubers have failed to get a consistent audience and have left the site or shifted to produce more often on TikTok and Facebook’s Instagram. YouTube introduced Shorts with star creators in 2020, and has unfurled several tools for video makers to generate money beyond ads. By March, the Shorts feature had racked up more than 6.5 billion daily views, nearly double the total from December, Google told investors. Last week, YouTube let everyone on its site upload Shorts.Since 2012, YouTube’s algorithm for promoting video has prioritized watch time. In a blog post, Amy Singer, a YouTube director, described the new fund as a “first step” in forming a business model for Shorts. “This is a top priority for us, and will take us some time to get it right,” she wrote.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Alphabet Inc. and Facebook Inc. tumbled on Monday, leading a broad move lower in internet stocks after Citigroup Inc. warned about the outlook for digital advertising, a key source of revenue for the sector.The firm downgraded both names to neutral from buy, writing that “caution is in order” for companies that derive revenue from digital advertising. While ad budgets are expected to continue shifting online, growth is likely to decelerate, and “historically, that usually isn’t bullish for multiples,” analyst Jason Bazinet wrote.Shares of Facebook closed down 4.1% on Monday, their biggest one-day percentage loss since November. Google-parent Alphabet ended down 2.6% in its worst session since March. The S&P 500 Communications Services index fell 1.9% while the Nasdaq 100 Index dropped 2.6%; both indexes also had their biggest one-day drops since March. Tech shares were broadly pressured on Monday by inflation concerns.Alphabet shares are trading at almost eight times revenue, near their highest in more than a decade, according to data compiled by Bloomberg. Facebook’s price-to-sales multiple is nine, well above the 5.2 ratio for companies in the Nasdaq 100 Stock Index.Even with the recent decline, the pair are the best performers among the five biggest U.S. technology companies this year. Alphabet is up more than 30%, while Facebook has risen 12%, exceeding Microsoft’s 11% gain. Both Apple and Amazon.com are negative for 2021.Both reported first-quarter revenue that dwarfed analyst estimates when they reported two weeks ago. Alphabet’s results were supported by a recovery in business categories that had struggled during the pandemic, such as travel and retail. Chief Financial Officer Ruth Porat said the results “reflect elevated consumer activity online and broad-based growth in advertiser revenue,” though the durability of these trends will depend on the pace of the global recovery from Covid-19.Facebook’s report showed strong demand from retailers and other advertisers, but it reiterated its view that growth could stall in the second half of the year.Digital ads have seen robust growth over the past two quarters as the pandemic accelerated a shift toward online spending. However, “the sell side has extrapolated the recent strength for the next five years,” a view that seems too optimistic, Citi wrote. The firm expects growth will decelerate in coming quarters, posing a risk to stock multiples.Read more: Tech Giants Reap Huge Ad Revenue Growth in First QuarterAmong other names in the group, Citi reiterated neutral ratings on both Pinterest Inc. and Twitter Inc, along with a sell rating on Snap Inc. The only digital-ad stock Citi recommends buying is Roku Inc., as “the connected TV market is still nascent.” Shares of Twitter, Snap, and Pinterest all fell on Monday.With the downgrade, Citi is now the only firm tracked by Bloomberg that doesn’t recommend buying Alphabet. Forty-two firms still have a bullish view on the shares. For Facebook, there are now 49 buy ratings, six holds, and three firms with a negative view on the stock. The average analyst price target points to potential gains of more than 20% for Alphabet, and more than 25% for Facebook.Last week, Bloomberg Intelligence wrote that ad pricing would remain a tailwind for Facebook this year “due to demand for its ad inventory, while ad-impressions growth could taper slightly amid reopenings.” It added that the social-media company was well-positioned to achieve 30%-plus growth in its core mobile-ad business despite tougher comparisons in the second half of the year.(Updates to market close and adds detail about Monday’s weakness.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Dr. Harvey Karp, Pediatrician & CEO of Happiest Baby and Jackie Nith Ishibashi, Snap Inc. Wellness Manager, joins Yahoo Finance’s Alexis Christoforous and Kristin Myers to discuss mental health for working mothers.